Stock markets and political experts are awaiting the meeting between Chinese President Xi and U.S. President Xi. The two leaders have not yet met this year. Tariff-related negotiations took place between senior intermediaries.
The two leaders will meet later this month. Until that happens, policymakers face high uncertainties. Trump recently threatened over 100% tariffs against China. He reacted to the country restricting rare earth exports.
The U.S. dominates in the technology sector. Alphabet (GOOG), Nvidia (NVDA), and Microsoft (MSFT) are the leading firms representing the country’s strength in this sector. Conversely, China has a vast mining sector for extracting rare earths. This is an environmentally unfriendly process that few countries are willing to undertake.
China might have an edge against the rest of the world. A shortage in rare earths would threaten to slow the production of AI-related hardware. The industry is already facing a severe shortage. Prices of storage, memory, and Nvidia chips are on the rise. An ADATA executive warned that the solid-state storage drive prices and memory would rise by 25% or more.
Two weeks remain before the meeting. Expected heightened market uncertainty. This will benefit traders, since volatility widens the price ranges for stocks. Lithium Americas (LAC), for example, peaked at $10.52 recently. It lost 9.35% last week. MP Materials (MP) peaked at around $100 and closed at $80.79 on Oct. 17. The government took positions in both of those firms.
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